Febrero 19, 2018

Stocks Surge After Incurring Massive Losses

09 Febrero 2018, 02:29 | Dolorita Barahona

The Dow Jones suffered its biggest single-day points decline on record as investors grew jittery about interest rates Spencer Platt Getty Images

The Dow Jones suffered its biggest single-day points decline on record as investors grew jittery about interest rates

USA stocks went on another bumpy ride on Wall Street, dropping sharply in early trading before recovering their losses by lunch time. "Getting over 3.05 percent would indeed break the 30-year downtrend and be very important to suggesting yields should begin a long-term trend higher". That combination usually carries stocks higher.

While Wall Street has been calling for a correction for some time, given the market's euphoric rise, the fall has been more violent and quicker than anticipated. "Whereas the USA dollar, the Japanese Yen are more of the safe-haven areas where you see investors flocking from the riskier assets". The Standard & Poor's 500 index lost 0.5 percent to 2,681.66. Kostin wrote in a research note earlier this week. Benchmark U.S. crude lost 21 cents to $61.58 per barrel in electronic trading on the New York Mercantile Exchange. This is the third drop for the Dow greater than 500 points in the last five days.

The Nikkei 225 tumbled as much as 7.1 percent on Tuesday before regaining some lost ground to close 4.7 percent lower.

Technology shares fell 1.4%, with Apple (AAPL.O) down 2.1%, while energy dropped 1.7% as oil prices slumped.

Higher interest rates, meanwhile, give central banks more leeway to stimulate the economy; should it fall into a recession, banks can trim rates again. A new survey by the American Association of Individual Investors showed the percentage of U.S. individual investors expecting a decline in stock prices has hit a three-month high.

It's been a wild week in global markets.

"The return of volatility after two relatively calm days supports the idea there are further losses to come in the days and weeks ahead", said CMC Markets analyst Michael McCarthy.

Activity was similarly volatile on the bond market. If investors think it is something more and decide to sell, that would just drive the markets lower.

The broad-based S&P 500 dropped 100 points or 3.75%, and the tech-rich Nasdaq was down 3.9%. Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent. The S&P 500 posted no new 52-week highs and 32 new lows; the Nasdaq Composite recorded 24 new highs and 113 new lows. Amazon and Facebook, two of the big stocks that had led the S&P's rally over the past year, were among the biggest drags on Thursday.

The Dow Jones industrial average continued to decline Thursday, falling by more than 1,000 points for the second time this week.

The question for investors is whether the turbulence is a sign that the long bull market is over. "So, that's a full market correction now". After a period of low borrowing costs that benefitted companies, the Federal Reserve may be moved to raise interest rates faster than investors expect. European equities weren't spared, with the Euro Stoxx 50 volatility gauge spiking toward the highest since June 2016 - the month of the Brexit vote. Brent crude, the worldwide standard for oil prices, dropped 15 cents to $65.36 per barrel in London. Brent crude, the benchmark for global oil prices, rose 25 cents to $67.11 a barrel in London.

The dollar fell to 108.84 yen from 109.42 yen.

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